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General Dynamics Is Big Winner in Wednesday Pentagon Contract Awards

The Department of Defense issued 18 contracts worth a total of $870 million on Wednesday. General Dynamics (NYSE: GD  )  won not only the biggest contract on offer, but the overall greatest dollar value of all contracts awarded.

General Dynamics' top contract win, a $187.5 million foreign military sales contract, calls for the the company to convert 44 M1A1 and 40 M1A2 Abrams main battle tanks to the M1A2S (Saudi Army) configuration for the Kingdom of Saudi Arabia. General Dynamics built the tanks, and DoD noted that "this contract was a non-competitive acquisition with one bid received." 

M1A2 Abrams. Source: Wikimedia Commons

The company's smaller contract, worth $26.9 million, went to GD's ordnance and tactical systems division. It hires the company to support the Mission Payload Module Non-Lethal Weapon System by developing, integrating, testing, producing, supporting, and preparing necessary documentation for the MPM-NLWS. DoD noted that the system will be mounted on Marine Corps Humvees or successor vehicles, and will "deliver an enhanced pyrotechnic (thermobaric effect) munition from a tube-launch system ... designed to suppress personnel ... to provide a graduated response option to scenarios involving crowd control, access or area denial, convoy operations, or engaging a threat."

The terms "pyrotechnic" and "thermobaric" might make the weapon seem more than nonlethal. However, a 2010 article in the Marine Corps Times explains that when translated from Pentagon-speak, what the DoD is really asking General Dynamics to produce is a launcher-fired "flash-bang" grenade -- designed to temporarily stun, blind, and deafen targets as far as 500 meters away, but not to kill. General Dynamics will work on this project through May 2016.


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Rich Smith

I love things that go "boom." Sonic or otherwise, that means I tend to gravitate towards defense and aerospace stocks. But to tell the truth, over the course of a dozen years writing for The Motley Fool, I have covered -- and continue to cover -- everything from retailers to consumer goods stocks, and from tech to banks to insurers as well. Follow me on Twitter or Facebook for the most important developments in defense & aerospace news, and other great stories besides.

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